Tuesday, 27 February 2018

There is an apparent risk that
the negotiations on the Brexit withdrawal agreement could break down over
forthcoming proposals to address the Irish border controls issue. It is
unfortunate that the UK government has not tabled its own treaty text or more
advanced proposals for customs facilitation away from the borders. And it is
tragic that the British public is burdened, in the form of their current Foreign
Secretary, with one of the most incompetent politicians in British history –
unable to grasp the obvious differences between levying a congestion charge at
the border of London boroughs and the vastly more complex task of avoiding
border checks between the UK and Ireland.

Be that as it may, in advance of
the Commission’s proposals due tomorrow, I have suggested (in Annex 1) a text on
the Irish border issues for the withdrawal agreement, which reflects the joint
report agreed in December (discussed here)
as much as possible. For ease of reference, Annex 2 includes the relevant excerpt
from the Joint Report.

I have reflected the text of the
joint report as faithfully as possible, with the exception of one contradiction
which I could not reconcile. Some parts of the joint report appeared to me to
be political commitments, so I suggest that they appear as Joint Declarations
or UK-only declarations which would be part of the Final Act of the withdrawal
agreement (this is a common approach to treaty drafting).

On the key issue of “regulatory
alignment”, my suggested text reflects that this is the third of three options,
and so suggests deferring negotiation on the details until after Brexit day. This
would also reflect the difficulty of negotiating the first or second option
before Brexit day, and would reduce the risk of a collapse of the talks, which
would jeopardise the two sides’ objectives on the border issue and the other
issues at stake in the talks (the protection of EU27 and UK citizens’ rights,
if they moved before Brexit day, and avoiding the economic impact of a WTO-only
“no deal” outcome on both sides).

However, this suggestion to support
the UK government’s argument to defer the “regulatory alignment” issues
presupposes that in the meantime the UK government puts full effort into the
first option, proposing a customs facilitation treaty that would avoid border
checks and a plan to give it effect. This should include any additional provisions
which may be necessary to keep the UK’s commitments to ensure North-South
cooperation functions on the island of Ireland after Brexit.

If the UK government cannot do so
then it should have the integrity to acknowledge that the promises on this
issue made during the referendum campaign were false, rather than blame the EU
or Ireland, or particularly Remain voters (whose concern about the possible complications
was dismissed as “scaremongering”) for the consequences.

Note that the “1973 reset” canard
that “the UK and Ireland never had controls before” ignores the fact that the
two countries never previously diverged as to whether they were EEC/EU members
or not. And the notion of Ireland leaving the EU – against the views of 88% of voters – seems
about as likely as the ghost of Eamon de Valera leading the next Orange order parade.

I have proposed alternative
wording, where relevant, to take account of the position of the current UK
government, on the one hand, and of a potential Labour government (see my comments
on Jeremy Corbyn’s speech yesterday) on the other.

Barnard & Peers: chapter 27

Photo credit: Forbes

Annex 1 – proposed
text of withdrawal agreement and declarations

Article 1

The withdrawal of the United
Kingdom from the European Union shall not prejudice the operation of the 1998 Good
Friday or Belfast Agreement, including its subsequent implementation agreements
and arrangements, and to the effective operation of each of the institutions
and bodies established under them.

This gives effect to part of paragraph 43 of the Joint Report. Unlike
the Joint Report, it does not refer only to the UK’s obligations.

Article 2

The United Kingdom and the
European Union shall refrain from installing any physical infrastructure or
related checks and controls at the border between Northern Ireland and the Republic
of Ireland.

This gives effect to the “no hard borders” part of paragraph 43 of the
Joint Report. Unlike the Joint Report, it does not refer only to the UK’s
obligations.

Article 3

1. This Part is without prejudice
to agreement on the future relationship between the European Union and the
United Kingdom.

2. This Part is specific to the
unique circumstances on the island of Ireland.

This partly reflects paragraph 46 of the Joint Report. The paragraph
goes on to say that the commitments “are made and must be upheld in all
circumstances, irrespective of the nature of any future agreement between the
European Union and United Kingdom”. However, this is inconsistent with the same
paragraph saying that the commitments “will not pre-determine the outcome” of
future talks; and it is questionable whether parties to a treaty can bind
themselves as to what replacement arrangement they might agree in future. The
provision on “unique” circumstances arguably points to a relaxation of the EU27’s
“no cherry picking” rule.

Article 4

1. Following the expiry of the [transitional]
[implementation] period, the obligation in Article 2 shall be ensured by a [customs
cooperation] [customs union] agreement to be negotiated before that date between
the United Kingdom and the European Union, which shall include any additional
provisions necessary to ensure the absence of physical infrastructure or
related checks and controls at the border and the protection of North-South
cooperation on the island of Ireland.

This gives effect to the first option in paragraph 49: “The United
Kingdom's intention is to achieve these objectives through the overall EU-UK
relationship”. The first set of square brackets reflect the UK government and
EU27’s different description of the period after Brexit Day. The second set of
square brackets offers an alternative wording reflecting the current UK’s
government’s position and a potential future Labour government position
respectively. See also the proposed joint declaration 3.

2. In the event that the agreement
referred to in paragraph 1 is not concluded, the United Kingdom will propose
specific solutions to address the unique circumstances of the island of Ireland,
and the parties will negotiate in good faith on that basis to ensure the
absence of physical infrastructure or related checks and controls at the border
and the protection of North-South cooperation on the island of Ireland.

Reflects the second option in paragraph 49.

3. In the absence of on agreement
pursuant to paragraphs 1 or 2, the United Kingdom will maintain full alignment
with those rules of the Internal Market [and the Customs Union] which, now or
in the future, support North-South cooperation, the all-island economy and the
protection of the 1998 Agreement. The list of those rules shall be established
by the Joint Committee within one year of the exit date.

The words in square brackets would be removed in the event of a Labour
government. This reflects the third option in paragraph 49. It adds an
obligation to agree on the list of relevant rules within one year of Brexit Day,
by which point it should be clearer whether discussions on the first or second
options lead to a possibility of agreement. The case for deferring this
discussion until after Brexit Day is that: a) it is premature in the absence of
discussions of the other options; and b) it increases the risk that no
withdrawal agreement can be concluded, putting at risk the intention to avoid a
hard border as well as all the other objectives of the agreement.

4. Each party will establish
mechanisms to ensure the implementation and oversight of any specific
arrangement to safeguard the integrity of the EU Internal Market [and the
Customs Union].

Based on paragraph 51 of the Joint Report. The precise intention of that
paragraph is not clear. The words in square brackets would be removed in the
event of a Labour government.

Declarations

Joint Declarations

1. Both Parties respect the
provisions of the 1998 Agreement regarding the constitutional status of
Northern Ireland and the principle of consent. This withdrawal agreement is fully
consistent with these provisions. The United Kingdom continues to respect and
support fully Northern Ireland's position as an integral part of the United
Kingdom, consistent with the principle of consent.

Based on paragraph 44
of the Joint Report.

2. Cooperation between Ireland
and Northern Ireland is a central part of the 1998 Agreement and is essential
for achieving reconciliation and the normalisation of relationships on the
island of Ireland. In this regard, both Parties recall the roles, functions and
safeguards of the Northern Ireland Executive, the Northern Ireland Assembly,
and the North-South Ministerial Council (including its cross-community
provisions) as set out in the 1998 Agreement.

Based on paragraph 47
of the Joint Report.

3. In order to give effect to
Article 4(1), the parties agree to enter into formal negotiations as soon as
possible after the exit date on the basis of the draft [customs cooperation]
[customs union] agreement proposed by the United Kingdom.

This would give concrete effect to the first option in paragraph 49 of
the Joint Report. It presupposes that the UK tables a draft treaty as soon as
possible in 2018. The options in square brackets offer alternative wording reflecting
the current UK’s government’s position and a potential future Labour government
position respectively.

4. Both Parties acknowledge that
the 1998 Agreement recognises the birth right of all the people of Northern
Ireland to choose to be Irish or British or both and be accepted as such.The people of Northern Ireland who are Irish
citizens will continue to enjoy rights as EU citizens, including where they
reside in Northern Ireland. This Agreement respects, and is without prejudice,
to the rights, opportunities and identity that come with European Union citizenship
for such people.

Based on paragraph 52 of the Joint Report. That paragraph goes on to
sate that “in the next phase of negotiations”, the parties “will examine
arrangements required to give effect to the ongoing exercise of, and access to,
their EU rights, opportunities and benefits”, but it is not clear what this
refers to.

5. Both Parties recognise that
the United Kingdom and Ireland may continue to make arrangements between
themselves relating to the movement of persons between their territories
(Common Travel Area), while fully respecting the rights of natural persons
conferred by Union law, in accordance with the relevant Protocols attached to
the EU Treaties.

Based on the first part of paragraph 54 of the Joint Report, with an
additional reference to primary EU law.

6.In accordance with Part X [financial settlement],both Parties will honour their
commitments to the PEACE and INTERREG funding programmes under the current
multi-annual financial framework. Possibilities for future support will be
examined favourably, in accordance with Part Y [[transitional] [implementation]
period].

Based on the first part of paragraph 55 of the Joint Report, with
cross-references to the other parts of the agreement added. It would be odd if
the UK were not consulted on the proposal for a future peace programme during
the transition or implementation period, given that it is likely to be tabled
in spring 2018 but perhaps not formally adopted until after Brexit day.

UK Declarations

1. The United Kingdom respects
Ireland's ongoing membership of the European Union and all of the corresponding
rights and obligations that entails, in particular Ireland's place in the
Internal Market and the Customs Union. The United Kingdom also recalls its
commitment to preserving the integrity of its internal market and Northern
Ireland's place within it, as the United Kingdom leaves the European Union's
Internal Market and [Customs Union][enters into a Customs Union with the European
Union].

Based on paragraph 45 of the Joint Report. The two alternatives in
square brackets reflect the positions of the current UK government and a
potential Labour government respectively.

2. The United Kingdom remains
committed to protecting and supporting continued North-South and East-West
cooperation across the full range of political, economic, security, societal
and agricultural contexts and frameworks of cooperation, including the continued
operation of the North-South implementation bodies.

Based on paragraph 48
of the Joint Report.

3. In the event that Article 4(3)
of this agreement becomes applicable, the United Kingdom will ensure that no
new regulatory barriers develop between Northern Ireland and the rest of the
United Kingdom, unless, consistent with the 1998 Agreement, the Northern
Ireland Executive and Assembly agree that distinct arrangements are appropriate
for Northern Ireland. In all circumstances, the United Kingdom will continue to
ensure the same unfettered access for Northern Ireland's businesses to the
whole of the United Kingdom internal market.

Based on paragraph 50
of the Joint Report.

4. The United Kingdom commits to
ensuring that no diminution of rights is caused by its departure from the
European Union, including in the area of protection against forms of
discrimination enshrined in EU law. The United Kingdom commits to facilitating
the related work of the institutions and bodies, established by the 1998
Agreement, in upholding human rights and equality standards.

Based on paragraph 53 of the Joint Report. There is an interesting
question as to whether this was intended to become a binding obligation, in
which case it should be reciprocated.

5 The United Kingdom confirms and
accepts that the Common Travel Area and associated rights and privileges can
continue to operate without affecting Ireland’s obligations under Union law, in
particular with respect to free movement for EU citizens.

Based on the second part of paragraph 54 of the Joint Report.

Annex II – joint report text

42. Both Parties affirm that the
achievements, benefits and commitments of the peace process will remain of
paramount importance to peace, stability and reconciliation. They agree that
the Good Friday or Belfast Agreement reached on 10 April 1998 by the United
Kingdom Government, the Irish Government and the other participants in the
multi-party negotiations (the '1998 Agreement') must be protected in all its
parts, and that this extends to the practical application of the 1998 Agreement
on the island of Ireland and to the totality of the relationships set out in
the Agreement.

43. The United Kingdom’s
withdrawal from the European Union presents a significant and unique challenge
in relation to the island of Ireland. The United Kingdom recalls its commitment
to protecting the operation of the 1998 Agreement, including its subsequent
implementation agreements and arrangements, and to the effective operation of
each of the institutions and bodies established under them. The United Kingdom
also recalls its commitment to the avoidance of a hard border, including any
physical infrastructure or related checks and controls.

44. Both Parties recognise the
need to respect the provisions of the 1998 Agreement regarding the
constitutional status of Northern Ireland and the principle of consent. The
commitments set out in this joint report are and must remain fully consistent
with these provisions. The United Kingdom continues to respect and support
fully Northern Ireland's position as an integral part of the United Kingdom,
consistent with the principle of consent.

45. The United Kingdom respects
Ireland's ongoing membership of the European Union and all of the corresponding
rights and obligations that entails, in particular Ireland's place in the
Internal Market and the Customs Union. The United Kingdom also recalls its
commitment to preserving the integrity of its internal market and Northern
Ireland's place within it, as the United Kingdom leaves the European Union's
Internal Market and Customs Union.

46. The commitments and
principles outlined in this joint report will not pre-determine the outcome of
wider discussions on the future relationship between the European Union and the
United Kingdom and are, as necessary, specific to the unique circumstances on
the island of Ireland.They are made and
must be upheld in all circumstances, irrespective of the nature of any future
agreement between the European Union and United Kingdom.

47. Cooperation between Ireland
and Northern Ireland is a central part of the 1998 Agreement and is essential
for achieving reconciliation and the normalisation of relationships on the
island of Ireland. In this regard, both Parties recall the roles, functions and
safeguards of the Northern Ireland Executive, the Northern Ireland Assembly,
and the North-South Ministerial Council (including its cross-community
provisions) as set out in the 1998 Agreement. The two Parties have carried out
a mapping exercise, which shows that North-South cooperation relies to a
significant extent on a common European Union legal and policy framework.
Therefore, the United Kingdom’s departure from the European Union gives rise to
substantial challenges to the maintenance and development of North-South
cooperation.

48. The United Kingdom remains
committed to protecting and supporting continued North-South and East-West
cooperation across the full range of political, economic, security, societal
and agricultural contexts and frameworks of cooperation, including the continued
operation of the North-South implementation bodies.

49. The United Kingdom remains
committed to protecting North-South cooperation and to its guarantee of
avoiding a hard border. Any future arrangements must be compatible with these
overarching requirements. The United Kingdom's intention is to achieve these
objectives through the overall EU-UK relationship. Should this not be possible,
the United Kingdom will propose specific solutions to address the unique
circumstances of the island of Ireland. In the absence of agreed solutions, the
United Kingdom will maintain full alignment with those rules of the Internal
Market and the Customs Union which, now or in the future, support North-South
cooperation, the allisland economy and the protection of the 1998 Agreement.

50. In the absence of agreed
solutions, as set out in the previous paragraph, the United Kingdom will ensure
that no new regulatory barriers develop between Northern Ireland and the rest
of the United Kingdom, unless, consistent with the 1998 Agreement, the Northern
Ireland Executive and Assembly agree that distinct arrangements are appropriate
for Northern Ireland. In all circumstances, the United Kingdom will continue to
ensure the same unfettered access for Northern Ireland's businesses to the
whole of the United Kingdom internal market.

51. Both Parties will establish
mechanisms to ensure the implementation and oversight of any specific
arrangement to safeguard the integrity of the EU Internal Market and the
Customs Union.

52. Both Parties acknowledge that
the 1998 Agreement recognises the birth right of all the people of Northern
Ireland to choose to be Irish or British or both and be accepted as such.The people of Northern Ireland who are Irish
citizens will continue to enjoy rights as EU citizens, including where they
reside in Northern Ireland. Both Parties therefore agree that the Withdrawal
Agreement should respect and be without prejudice to the rights, opportunities
and identity that come with European Union citizenship for such people and, in
the next phase of negotiations, will examine arrangements required to give
effect to the ongoing exercise of, and access to, their EU rights,
opportunities and benefits.

53. The 1998 Agreement also
includes important provisions on Rights, Safeguards and Equality of Opportunity
for which EU law and practice has provided a supporting framework in Northern
Ireland and across the island of Ireland. The United Kingdom commits to
ensuring that no diminution of rights is caused by its departure from the
European Union, including in the area of protection against forms of
discrimination enshrined in EU law. The United Kingdom commits to facilitating
the related work of the institutions and bodies, established by the 1998
Agreement, in upholding human rights and equality standards.

54 Both Parties recognise that
the United Kingdom and Ireland may continue to make arrangements between
themselves relating to the movement of persons between their territories
(Common Travel Area), while fully respecting the rights of natural persons
conferred by Union law.The United
Kingdom confirms and accepts that the Common Travel Area and associated rights
and privileges can continue to operate without affecting Ireland’s obligations
under Union law, in particular with respect to free movement for EU
citizens.

55. Both Parties will honour
their commitments to the PEACE and INTERREG funding programmes under the
current multi-annual financial framework. Possibilities for future support will
be examined favourably.

56. Given the specific nature of
issues related to Ireland and Northern Ireland, and on the basis of the
principles and commitments set out above, both Parties agree that in the next
phase work will continue in a distinct strand of the negotiations on the
detailed arrangements required to give them effect. Such work will also address
issues arising from Ireland’s unique geographic situation, including the
transit of goods (to and from Ireland via the United Kingdom), in line with the
approach established by the European Council Guidelines of 29 April 2017.

Monday, 26 February 2018

Labour party leader Jeremy Corbyn
sharply divides public opinion. For my part, I think he’s neither the Messiah nor a
very naughty boy – simply a politician who should mainly be judged on the policies
he’s advocating today, not by dubious claims (or libellous smears) about what
he may have said or done decades ago.

In a speech
today, he clarified some aspects of Labour’s Brexit policy, which had
previously been rather vague on most points. Leaving aside his domestic policy
arguments, and his critique of the government’s confusion on Brexit policy –
which was accompanied by the sound of glass houses shattering – he made some key
points.

First of all, the tone of his speech was important. He began by condemning the scapegoating of
migrants, setting of generations against each other and playing off the
different nations of the UK – laying justified emphasis on preserving the Good
Friday Agreement in Northern Ireland. And he ended by inverting the Prime
Minister’s infamously narrow view of national identity in the modern world,
declaring that “we can only fully achieve what we want to as citizens of
Britain by also recognising we are “citizens of the world”.”

As for the content, the most significant
point was support for a form of customs
union with the EU after Brexit – or more precisely, after the post-Brexit transitional
period, where the EU27 and the UK government have agreed that the customs union
will continue (see my discussion of the competing proposed texts here).
While the UK necessarily will leave the EU’s customs union on Brexit, Corbyn
advocated that the UK should “seek to negotiate new comprehensive UK-EU customs
union to ensure that there are no tariffs” with the EU, “and to help avoid any
need for a hard border in Northern Ireland”. In other words, the UK would be
leaving the customs union, but would
still have a customs union with the EU.

A customs union means that goods
circulate freely between the parties.* It’s linked to having a uniform policy on
trade policy towards non-members of the customs union, although the EU/Turkey
customs union does allow for separate deals (at the cost, however, of
additional checks at the border) and customs unions do not cover services
issues.

Corbyn went on to elaborate that
the UK would have to have “a say” in future trade deals, not becoming a “passive
recipient of rules decided elsewhere by others”. He did not explain further his
view on two key issues: what if the EU were not willing to agree such an
arrangement? And if it were agreed, what would happen if the EU was keen to
negotiate a free trade deal with a certain country, and the UK was not – or vice
versa?

On other issues, he said little explicitly
about non-tariff barriers, although his anecdote about the process of building
a Mini neatly demonstrated the importance of avoiding customs checks for the
car industry’s just-in-time production process. He said little about services either,
besides disdain for the UK’s financial services industry.

Corbyn did commit to “use funds
returned from Brussels” on UK public services after Brexit – right after
criticising people for “making up numbers and parading them on the side of a
bus”. The problem with this promise is that the bus did not only mislead by
misstating the amount of money actually sent to the EU – but also by suggesting
there would be any “Brexit dividend” at all. The government’s own forecasts (which Corbyn
later refers to, when it suits him) suggest a reduction in economic growth, which would entail an inevitable downturn in public revenue.

Furthermore, Corbyn’s own plans
for maintaining a future relationship would necessarily entail further costs.
He expresses support for remaining in at least some EU agencies, bodies and programmes;
there would be a contribution required for that. He also supports some form of
close link with the broader single market, which implicitly falls short of full
participation – given that he rules out the continuation of the free movement
of people after the Brexit transition, and has a list of issues where he wants
to “negotiate protections, clarifications or exemptions where necessary in
relation to privatisation and public service competition directives, state aid
and procurement rules and the posted workers directive.”

He briefly mentions
continued defence cooperation, but does not refer to internal security issues.
Finally, he places repeated emphasis on not lowering labour, environmental,
consumer and food safety standards. There’s no specific mention of the EU’s Court
of Justice.

Comments

Corbyn described a lot of things he supported about the EU, and also offered
a shorter list of things he disliked. Let’s look at the latter first. Ian Dunt
has discussed most of the arguments about privatisation et al here
– pointing out, for instance, that countries with a bigger state role in the
economy, like Scandinavian social democracies, also exist as EU members. As for
the posted workers’ Directive, a revision which might address Corbyn’s concerns
is well underway: the text of the Council’s position (now being negotiated with
the European Parliament) on that revision is here.

But that is inevitably linked to the things that Corbyn liked about the EU.
The key question here is: in legal terms, what exactly (besides a customs
union) would the EU/UK relationship look like? Presumably some form of ad hoc
relationship to the single market. This sounds a lot like what the government is
aiming for, except that the Conservatives are troubled by the thought of making
many commitments on issues which Corbyn is keen about (regulation of product
standards, labour and environmental law, tax avoidance), and conversely relaxed
about the issues that Corbyn would want exemptions from (competition and state
aid). But as long as the EU side regards such suggestions as “cherry-picking”, there’s
no reason to assume that a red unicorn is any more politically feasible than a blue
unicorn.

Now for the most concrete part of the Corbyn speech: the customs union commitment.
This might be simply a tactical move designed to make life difficult for the
government, since some Conservative MPs also support the idea. But it’s not
surprising that politicians play politics.

As for the broader political impact of the move, an interesting article
by Duncan Robinson provides evidence that there is not a huge public demand for
more free trade deals, especially
among Leave voters, and that trade policy was not a major factor in the Leave
vote. It’s possible that enthusiasm for free trade deals is even less among
Labour Leave voters – leaving Corbyn freer to placate Labour Remain supporters
by endorsing a link to the EU on this issue, without irritating Labour Leave
voters unduly. Indeed, Corbyn’s speech was critical of the prospects of trade
deals with the US and China, from a Labour perspective.

In fact there is also support for Labour’s customs union position from a
business perspective – suggesting there is not a vast business demand to exit some
form of customs union. The Confederation of British Industry backed
the customs union aspects of the Corbyn speech, and the Institute of Directors
earlier proposed
a more detailed (but probably more limited) form of customs union themselves. Corbyn
himself noted that the government’s economic assessments suggest that future free
trade deals would only have a modest economic benefit.

What about the counter-arguments against staying in a form of customs union?
The “Labour Leave” organisation may well call it a “betrayal” of the Brexit
vote, although it’s striking to note that this “Labour” body has received major
amounts of funding from Conservatives.
Some non-EU countries do have a customs union with the EU, as noted above, and there
was no “customs union” box on the referendum ballot paper.

Some call a customs union a “protectionist racket”. But most
countries have some form of trade protection against foreign goods; a customs
union is merely a mechanism of agreeing such rules by a group of countries collectively.
Along the same lines, it’s suggested that a customs union prevents its parties “trading
with the world”, but many EU countries (including the UK) have a significant
trade with non-EU countries, and the EU has a number of free trade deals in
force or under negotiation, as detailed here.
As for “starving the poor”, the impact
of EU trade policies on developing countries is often exaggerated – given that
the EU has a number of free trade deals with and unilateral tariff preferences
for developing countries, especially for the very poorest, as discussed here.

Some would prefer to abolish all tariffs, but there’s no mandate from the
referendum or the last election for that policy, which would leave the UK with
little or no negotiating capital in talks with the EU or anyone else. And since
that policy’s chief proponent, Professor Patrick Minford, accepts
(indeed advocates) that it would “mostly
eliminate manufacturing” in the UK, it’s not surprising that this policy has no
appeal to the Labour party.

Time will tell whether today’s
speech simply set out a Labour Brexit
policy, designed as a short-term tactical shot across the bows of the
Conservative party to be developed further later; or the Labour Brexit policy, left deliberately vague on many points to
continue to serve as a compromise position designed to appeal to significant numbers
of both Leave and Remain supporters. In any event, its political significance
is that it creates a clear distinction between the Brexit policies of the two
largest parties. *clarification added 27 Feb 2018: I'm referring to free circulation of goods within the definition of the EU's customs union set out in Article 29 TFEU. That doesn't mean the same thing as "no border checks"; as the Corbyn speech recognises, a customs union agreement would only "*help* to avoid any need for a hard border in Northern Ireland".

Wednesday, 21 February 2018

Earlier today, the UK government
tabled its response
to the EU Commission’s proposed
text of part of the Brexit withdrawal agreement. This blog post updates my first
version of the ‘running commentary’ on the draft text of the agreement as
it develops, to take account of the UK’s position.

To summarise the points I made in
the first version: a) ultimately the withdrawal agreement (if it is
successfully negotiated and comes into force) will be the key legal text
governing the Brexit process as such; b) however, there will be post-Brexit
treaties governing the future relationship between the EU and the UK (for
instance, see my recent post on future treaties
on security); c) this is only a partial text, concerning the transitional
period (in EU27 jargon) or implementation period (in UK jargon) and possibly some
(probably not all) of the part on common provisions; d) the Commission proposal
is not yet the official position of the Council; e) as the draft agreement
takes shape, it becomes feasible legally to ask the ECJ for its opinion on it
(the Court could fast-track such an opinion); and f) the numbering of Articles
is provisional for now.

For clarity, starting from this edition, I have divided the
annotation of each of the proposed Articles into three sections: the UK
position; the background to the Commission proposal; and my comments.
Obviously, all the sections on the UK position are new. I have updated my
comments on each proposed Article to include discussion of the UK position, where relevant; all
new comments are underlined.

In addition to the parts of the
withdrawal agreement on the transition or implementation period and common provisions,
there will be parts dealing with governance
and dispute settlement, the financial
settlement, the rights of EU27 and
UK citizens who moved before Brexit day, the Irish border, and on ‘winding
up’ the UK’s involvement with EU law. According to the press, further texts
from the EU27 side will be proposed on February 28th.

For convenience, here is a
summary of the main differences between the UK and the EU Commission position:
a) the UK would explicitly exclude new
Treaty amendments from applying to the UK; b) the UK wants to discuss flexibility over the end date of the
transition period; c) the UK wants to be excluded
from more EU measures; d) conversely, the UK wants more power to opt in to justice and home affairs measures; e) the
UK wants to provide for a possible early replacement treaty on policing and criminal law; f) the UK
wants more consultation rights on new
EU laws and international relations; g) the UK questions the need to prevent UK
bodies from making risk assessments;
h) the UK wants a different approach to “rolling over” international treaties;
i) the UK wants more power to become bound
by international treaties; j) the UK wants a different approach to dispute settlement, along with a good faith clause; and k) the UK wants to agree fisheries catches separately with the EU, rather than just be
consulted.

The UK paper does not mention the
financial settlement, on which the Commission proposal says:

It should be
noted that the detailed provisions relating to the financial settlement aspects
of the transition will be covered under the Financial Provisions of the Withdrawal
Agreement. In addition to the elements contained in the Joint report of 8
December 2017, the Financial Provisions of the Withdrawal Agreement should also
cover the financing, during the transition period, of the relevant Common
Foreign and Security Policy and Common Security and Defence Policy agencies or
operations on the basis of the same contribution key as before the withdrawal
date.

Moreover, the Commission proposal
did not refer to the EU27 position that acquired
rights for EU27 citizens who moved to the UK, and for UK citizens who moved
to the EU27, will still be obtained for those who move during the transition
period. The UK government has contested this suggestion publicly, but its paper
does not mention this point.

Barnard & Peers: chapter 27

Photo credit: The Telegraph

Commentary on the draft
Withdrawal Agreement

Version of 21 February 2018

PART [X] [of the Withdrawal Agreement]

COMMON PROVISIONS

[Article x

Definitions]

[1. ‘Union law’ shall mean:]

(i) the Treaty on European Union
("TEU"), the Treaty on the Functioning of the European Union
("TFEU") and the Treaty establishing the European Atomic Energy
Community ("Euratom Treaty"), together referred to as “the Treaties”,
as amended or supplemented, as well as the successive Treaties of Accession;

(ii) the general principles of
Union law;

(iii) the acts adopted by the
institutions, bodies, offices or agencies of the Union;

(iv) the international agreements
to which the Union and/or Euratom is party;

(v) the agreements between Member
States entered into in their capacity as Member States of the Union and/or of
Euratom;

(vi) decisions and agreements of
the Representatives of the Governments of the Member States meeting within the
European Council or the Council.

UK position: The UK proposes that thistext appears in the Withdrawal Agreement
section of the agreement, instead of the section on Common Provisions. It
labels it “Article XA”and gives it
the title “Definitions”.

Substantively, the UK takes a partly different approach from the
Commission, suggesting definitions for “acts”, “Treaties”, “bilateral
international agreement” and “Union law”.“Acts” are defined by reference to various EU measures; “Treaties” only
includes Treaty amendments before Brexit day; “bilateral international
agreement” means those treaties which the EU entered into as a bloc; it’s
clarified that Treaty Annexes, Protocols etc are covered; and acts adopted
during the transitional/implementation period are explicitly covered.

Background: The text here is taken from footnote 1 to
the Commission proposal, which reads: “The Withdrawal Agreement will contain,
in its Part on Common Provisions, an article defining Union law as meaning:…”
This text reflects (and fleshes out) the first sentence of para 13 of the
negotiation directives, which say that the transition rules should cover “the
whole of the Union acquis, including Euratom matters”.

Comments: This text could be compared a contrario to
the text of an accession treaty to the EU. Oddly, there is no explicit mention of the EU Charter of
Rights in either the Commission or UK draft; although it is referred to in the Treaties
and legislation, it is a separate legal text. The UK’s position excluding the
application of post-Brexit Treaty amendments to the UK is an important
clarification, although it is not explicitly clear whether or not the
Commission intended such amendments to apply.

[Article X + 1

Interpretation]

1.The
provisions of this Agreement referring to concepts or provisions of Union law
in their implementation and application are interpreted in conformity with the
relevant decisions of the Court of Justice of the European Union given before
the end of the transition period.

2.Where
a provision of Union law is amended, supplemented or replaced during the
transition period, the reference to this provision of Union law is to be read
as referring to the amended, supplemented or successor provision, provided that
the change takes effect before the end of the transition period.

UK position: Accepted in principle, but the UK suggests
technical changes – inserting para 1 into Article X+1 (discussed below), and
adding a reference to the Commission. Para 2 is apparently covered by the UK
proposal on definitions.

Background: The text here is also taken from footnote 1
to the Commission proposal, which reads: “The Part on Common Provisions will
also contain an article to the effect that…” the text of paragraph 1, and
“Furthermore, a specific article of the Part on Common Provisions will clarify
that…” the text of paragraph 2. I have added a suggested heading for the title
of the Article. It is possible that these will end up as separate Articles.
There might be other rules added on interpreting the withdrawal agreement.

Comments: If they appear in the Common Provisions of
the agreement, these cross-references to the development of case law or
legislation during the transition period will presumably also apply to the
citizens’ rights and financial settlement provisions of the agreement.

The UK government is particularly concerned about being bound by EU
legislation adopted during the transition period without its involvement,
although note that in the Commission proposal this rule only applies where
existing law is amended and where that amendment "takes effect"
before the end of the transition period. Possibly point (iii) in the previous
Article is meant to cover cases of brand new legislation, but this is
unimpressive drafting. Also, the term “takes effect” is unclear: Directives
enter into force immediately, but only have full legal impact after the
deadline to transpose them, which is usually two years later. The UK’s
approach in its proposed definitions clause is simpler and clearer. The UK
also suggests a “good faith” clause to deal with new EU legislation it disagrees
with (see discussion below) but does not propose a text for this.

In any event, the Commission proposals do not reflect para 59 of the
December joint report on progress in the Brexit talks, which states that future changes to
the basic EU funding and spending laws which affect the UK will not apply to
it, which would for instance prevent any changes being made to the UK rebate
after it loses its power to veto such changes. However, as noted above, the
Commission states that issues relating to the financial settlement will be in a
separate part of the withdrawal agreement, so this issue might be covered
there.

[Article NN

References to Member States]

For the purposes of this
Agreement, all references to Member States and competent authorities of Member
States in provisions of Union law made applicable by this Agreement shall be
read as including the United Kingdom and its competent authorities, except as
regards:

(a) the nomination, appointment
or election of members of the institutions, bodies, offices and agencies of the
Union, as well as the participation in the decision-making of the institutions;

(b) the attendance in the
meetings of the committees referred to in Article 3(2) of Regulation (EU) No
182/2011 of the European Parliament and of the Council, of Commission expert
groups or of other similar entities, or in the meetings of expert groups or
similar entities of bodies, offices and agencies of the Union, unless otherwise
provided in this Agreement;

(c) the participation in the
decision-making and governance of the bodies, offices and agencies of the
Union; […].

UK position: the UK comments on the proposed Article
X+2 accept this clause, with only technical amendments.

Background: The text here is taken from footnote 2 to
the Commission proposal, which reads: “The Withdrawal Agreement will contain,
in its Part on Common Provisions, the following:”I have suggested a title for the Article. I refer to this as “Article
NN” because the proposed Article X+2(1), which refers to it, does so (see
below). There will likely be other Articles in the “Common Provisions” part of
the agreement. It is not clear why there are deleted words in point (c). Note
that the proposed Article X+2(4) includes a derogation from this Article, allowing
some limited participation of the UK in EU bodies as an exception.

This text reflects the second sentence of para 13 of the negotiation
directives, which states that “the Union acquis should apply to and in the
United Kingdom as if it were a Member State”, as well as the final sentence of
para 18 and the first sentence of para 19 on the exclusions from a UK role in
the institutions.

Comments: While the Treaties only refer to Member
States as having a full decision-making role within EU institutions, there is
nothing to rule out consultation with non-Member States. Indeed, the Schengen
association agreement with Norway and Iceland gives them consultation rights at
ministerial level. The notion that the UK is expected to apply new EU law (see
the previous Article) without even being informally consulted on the relevant
proposals therefore has a vindictive tinge to it. In any event, the proposals
do not reflect para 30 of the December joint report on progress in the Brexit talks, which states that there should be a
system to decide jointly on the incorporation of future amendments to the
social security rules in the withdrawal agreement.

PART [X] [of the Withdrawal Agreement]

TRANSITION PERIOD

Article X

Transition period

There shall be a transition
period, which shall start on the date of entry into force of this Agreement and
end on 31 December 2020.

UK position: the UK prefers the term “implementation
period”, and then uses the word “Period” throughout its version of this text.
It also places the end date in square brackets, which means the text is for
discussion.In the UK view, the end
date should not be fixed but needs to be flexible to take account of the
implementation process.

Comments: The Commission’s proposed end date is
convenient for the EU27 side as it corresponds with the end of the current
multi-annual EU budget cycle. The UK’s desire for a more flexible date
reflects its uncertainty about the timing of being ready post-Brexit, although
its paper refers to a transition/implementation period of “around two years”,
as the Prime Minister has mentioned before. Any prospect of providing in the
withdrawal agreement itself for an indefinite renewal of the
transition/implementation period could raise legal issues as to whether this
falls beyond the scope of Article 50 TEU.

As the Commission’s proposal stands, the transition period could not be
extended unless another clause is added in the withdrawal agreement to allow
for this. If no such clause is added, extending the transition period after
Brexit day would need a new treaty adopted on a different legal basis than Article
50 (which only applies to the withdrawal process) which would need to be
adopted by unanimity and possibly also ratification by national parliaments
(although some or all of the treaty could apply provisionally while national
ratification was taking place).

Note that Article X+1(2), discussed below, provides conversely for part
of the transition period to be curtailed as regards foreign policy issues.

Article X + 1

Scope of the transition

1. Unless otherwise provided in
this Part, Union law shall be binding upon and applicable in the United Kingdom
during the transition period.

However, the following provisions
of the Treaties and acts adopted by the institutions, bodies, offices or
agencies of the Union shall not be applicable to and in the United Kingdom
during the transition period:

(a) provisions of the Treaties
and acts which, pursuant to Protocol (No 15) on certain provisions relating to
the United Kingdom of Great Britain and Northern Ireland, Protocol (No 19) on
the Schengen acquis integrated into the framework of the European Union or
Protocol (No 21) on the position of the United Kingdom an Ireland [sic] in respect of the area of freedom,
security and justice, or pursuant to the provisions of the Treaties on enhanced
cooperation, were not binding upon and applicable in the United Kingdom before
the date of entry into force of this Agreement as well as acts amending such
acts;

(b) Article 11(4) TEU, Articles
20(2)(b), 22 and the first paragraph of Article 24 TFEU and acts adopted on the
basis of those provisions;

UK position: the UK would split this into paragraphs
(1) and (1a). In paragraph 1, the UK accepts the wording of the Commission’s
proposed first sub-para “Unless otherwise provided in this Part, Union law
shall be binding upon and applicable in the United Kingdom during the
transition period”, except for the word “transition”. An explanatory note makes
the point that this clause should be understood as reciprocal, ie the EU would
still have obligations to the UK.

The UK version of the first exclusion clause would also exclude
international agreements related to the opt-out clauses, as well as the
policing and criminal law measures it opted out of in 2014 pursuant to the
Lisbon Treaty protocol on transitional provisions.

The UK would move the second exclusion clause to an Annex, and exclude
a number of other Treaty clauses: Article 10(4) TEU (EU political parties); Article
12 TEU (provisions on national parliaments, apart from 12(a), on consultation
of national parliaments); Article 20 TEU (enhanced cooperation); Article 69
TFEU (national parliaments and JHA measures); Article 223 TFEU (some rules
relating to the European Parliament); Articles 293-297 TFEU (some rules on the
decision-making process); Articles 326-334 TFEU (enhanced cooperation, except
the UK could still opt in to JHA measures it had opted out of, by using this
process); Article 353 TFEU (Treaty amendments); Article 354 TFEU (suspension of
EU membership); part of the Protocol on national parliaments; and some
provisions of the Euratom treaty.

Background: The rules about what is included in the
scope of UK obligations appear as a proposed Article discussed above.

In the Commission proposal sub-paragraph 1(a) keeps the UK’s existing
opt outs from the single currency, Schengen, Justice and Home Affairs (JHA) law
and enhanced cooperation (a system where some Member States go ahead and adopt
EU law without the others), except where the UK opted in to EU laws in these
areas before Brexit day. The JHA exclusion reflects the final sentence of para
13 of the negotiation directives; the other exclusions are not mentioned in
those directives.

Comments: The UK’s concern about reciprocal
application of the obligations by the EU too is valid. This clause should be
amended to make clear that both sides will continue to apply the relevant EU
law to the other side.

There is no opt-out from Treaty amendments in the Commission proposal, but
in the UK version of the “definitions” clause there would be. It is odd
that the text does not exclude the UK from “permanent structured cooperation”
in the area of defence, given that the UK decided to opt out when most Member
States decided to trigger that process recently.

Sub-paragraph 1(a) excludes the Treaty rules and legislation related to
the European citizens’ initiative (on that process, see the case law discussed here) and also voting and standing for office in the European Parliament
and local government. There is a need for a transitional clause to deal with
the situation of those EU27 citizens who were elected to local government in
the UK (and vice versa) before Brexit day.

Conversely other EU citizenship provisions will logically still apply.
This includes the “Ruiz Zambrano” case law on UK citizen children with non-EU
parents, which I discussed here.

The UK’s suggested additional exclusions are mostly consistent with
the rest of the text, although the EU27 side might not agree that the UK can
opt in to JHA measures it did not opt in to before Brexit day. To be consistent
with the UK’s proposed exclusions from the TFEU rules on suspension and amendment,
surely it should also be excluded from Articles 7 and 48 TEU, dealing with the
same issues.

2. Should an agreement between
the Union and the United Kingdom governing their future relationship in the
area of the Common Foreign and Security Policy and the Common Security and
Defence Policy become applicable during the transition period, Chapter 2 of
Title V of the TEU and the acts adopted on the basis of those provisions shall
cease to apply to the United Kingdom from the date of entry into force of that
agreement.

UK position: Agreed with only technical amendments
suggested.

Background: This proposed clause is partly consistent
with a statement adopted by the Council when it adopted the negotiation directives.
However, that statement also referred to the “fight against terrorism and
international crime”, which are JHA issues.

Comments: This is the one field where the Commission’s
proposal contemplates an early end to the transitional period. By contrast, the
UK Prime Minister’s Florence speech referred to the possibility of ending the
transitional (or ‘implementation’) period early for a number of issues at
different times. An early end to the transition period in this field would
avoid the awkward situation where the UK becomes bound by foreign policy
measures which it could have vetoed if it were a Member State. It would also
end a possibility for linking defence issues to trade issues, although the
policy in the Florence speech (and since) was not to insist upon such a
link. As noted above, a more recent speech by the Prime Minister (discussed here)
goes into more detail on this issue.

Legally it is questionable whether the UK and EU would actually be
constrained by the withdrawal agreement if they wanted to sign a treaty
replacing these rules in other fields of EU law during the transition period.

3. During the transition period,
the Union law applicable pursuant to paragraph 1 shall deploy in respect of and
in the United Kingdom the same legal effects as those which it deploys within
the Union and shall be interpreted and applied in accordance with the same
methods and general principles as those applicable within the Union.

UK position: Agreed with only technical amendments
suggested.

Background: This proposed para transposes para 14 of the
Council negotiation directives, which refer explicitly to the direct effect and
supremacy of EU law.

4. The United Kingdom shall not
participate in any enhanced cooperation:

(a) in relation to which
authorisation has been granted on or after the date of entry into force of this
Agreement; or

(b) within the framework of which
no acts have been adopted before the date of entry into force of this
Agreement.

UK position: Agreed in principle, but with a different
approach to drafting – these measures would be referred to in an Annex, rather
than in this Article.

Background: This paragraph is not reflected in the Council
negotiation directives.

Comments: This clause is particularly relevant to the
proposal on the financial transaction tax, which is subject to the enhanced
cooperation process (without UK participation) but where there is no agreement
yet (see more on the background to the tax proposal here). If this para is agreed, the suggestion that the UK might somehow
become bound as such by the tax during the transition period is therefore, as
things stand, frankly scaremongering. There is a risk that the tax would have
some extraterritorial effect upon the City of London, but that risk would
equally exist if the UK were still a Member State, since it could not veto an
enhanced cooperation measure that it was not participating in.

5. In relation to acts adopted
pursuant to Title V of Part III of the TFEU by which the United Kingdom is
bound before the date of entry into force of this Agreement, Article 5 of
Protocol (No 19) on the Schengen acquis integrated into the framework of the
European Union and Article 4a of Protocol (No 21) on the position of the United
Kingdom and Ireland in respect of the area of freedom, security and justice shall
continue to apply during the transition period. The United Kingdom shall,
however, not have the right of opt-in provided for in those Protocols to
measures other than those referred to in Article 4a of Protocol No 21.

UK position: Agreed in principle, with different
drafting and the addition of the power to opt in to an international agreement
which was not yet in force on Brexit day.

However, the UK proposes three more clauses on this issue, which would
allow it to opt in to new measures if agreed with the EU, and would provide for
an early removal of this issue from the withdrawal agreement. As noted above,
this is consistent with a statement of the Council, but not the Commission’s
proposal. It is also the subject of a recent speech by the Prime Minister. For
an analysis of the speech and a proposed treaty, see here.

Background: This paragraph is reflected in the fourth
sentence of para 13 of the Council negotiation directives.

Comment: The Commission proposal means that the UK
can opt in to new JHA laws amending JHA laws which it is already bound by. Note
that the UK has already opted out of the ‘Dublin IV’ proposal on allocation of
asylum seekers, so the suggestion that it could be bound by that law during the
transitional period is pure scaremongering.

6. Unless otherwise provided in
this Part, during the transition period, any reference to Member States in the
Union law applicable pursuant to paragraph 1 shall be understood as including
the United Kingdom.

However, where acts of the Union
provide for the participation of Member States, nationals of Member States or
natural or legal person residing or established in a Member State in an
information exchange, procedure or programme and where such participation would
grant access to sensitive information that a third country or natural or legal
person residing or established in a third country is not to have knowledge of,
these references to Member States shall be understood as not including the
United Kingdom.

UK position: the UK accepts thefirst sub-paragraph, apart from the word ‘transition’ and an
additional reference referring to an annex with some ‘horizontal provisions’ –
such as that all references to the “European Union” include the UK.

The UK sees little point to the second sub-paragraph and has placed it
in square brackets for further discussion.

Background: The first sub-paragraph reflects the second
sentence of para 13 of the Council negotiation directives. However, the second sub-paragraph
does not reflect those directives.

Comments: It seems that the Commission is concerned
that the UK might hand information over to non-EU countries without
authorisation, whereas the UK cannot see the point of this concern.

Article X+2

Institutional arrangements

1. Notwithstanding Article X+1,
during the transition period [points (a), (b) and (c) of Article NN from the
Common Provisions] shall apply.

See the text of “Article NN”, discussed above. As a reminder, this
Article removes the UK from the EU institutions and other bodies. The UK
accepts this paragraph, as well as (as noted above) the text of Article NN, with
only technical amendments.

2. For the purposes of the
Treaties, during the transition period, the parliament of the United Kingdom
shall not be considered to be a national parliament.

UK position: the UK accepts this but a purely technical
amendment would move it to an Annex.

Background: This sub-paragraph does not explicitly reflect
anything in the Council negotiation directives.

Comments: It arguably is implicit that if the UK is
not part of the EU institutions, there is no requirement to consult the UK’s
national parliament on proposed EU measures. But even if there is no longer a
legal obligation to do so, it is hard to see what harm would be caused by
consulting the UK parliament, or what legal rule would prevent the EU agreeing
to do so outside the context of the formal role for national parliaments of
Member States set out in the Treaties.

3. For the purposes of Articles
282 and 283 TFEU and of Protocol (No 4) on the Statute of the European system
of central banks and of the European Central Bank, during the transition
period, the Bank of England shall not be considered to be a national central
bank.

UK position: the UK accepts this with a technical
amendment but seeks to confirm that all other references to central banks will
still include the UK.

Background: This sub-paragraph does not explicitly reflect
anything in the Council negotiation directives.

Comments: Arguably it’s implicit that if the UK is
not part of the EU institutions, it follows that the Bank of England does not
have the status of a national central bank in its relations with the ECB.

4. By way of derogation from
paragraph 1, during the transition period, representatives or experts of the United
Kingdom, or experts designated by the United Kingdom, may, upon invitation and
on an case-by-case basis, exceptionally attend meetings or parts of meetings of
the committees referred to in Article 3(2) of Regulation (EU) No 182/2011 of
the European Parliament and of the Council, of Commission expert groups, of
other similar entities, or of bodies, offices or agencies where and when
representatives or experts of the Member States or experts designated by Member
States take part, provided that one the following conditions is fulfilled:

(a) the discussion concerns
individual acts to be addressed during the transition period to the United
Kingdom or to natural or legal persons residing or established in the United
Kingdom;

(b) the presence of the United Kingdom
is necessary and in the interest of the Union, in particular for the effective
implementation of Union law during the transition period.

During such meetings or parts of
meetings, the representatives or experts of the United Kingdom or experts designated
by it shall have no voting rights and their presence shall be limited to the
specific agenda points that fulfil the conditions set out in point (a) or (b).
In the invitation to be sent to representatives or experts of the United
Kingdom or to experts appointed or designated by it, the chair of the meeting
concerned shall clearly identify the agenda points for which their attendance
is allowed.

UK position:Consultation
would not be case-by-case or exceptional; the test of ‘necessary and in the
interests of the Union’ would be dropped; this would extend to international
agreements; and the restriction on voting would be dropped (although it is
covered by Article NN).Note that
the UK also suggests a new paragraph 4a, under which proposals other legal acts
would also be sent to the UK for consultation.

Background: The first half of this sub-paragraph
reflects para 19 of the Council negotiation directives, and the second half
elaborates upon that rule. Note that a statement by the Commission commits itself to issue a guidance document on how
to apply this rule consistently in practice.

A footnote refers to the official publication of Regulation 182/2011, which sets out general rules for Member
States’ participation in committees which govern the Commission’s use of
implementing powers.

Comments: As in the rest of this Article and Article
NN, it is questionable whether it is really necessary to limit the UK’s purely
consultative role to this extent. Certainly there is only a weak argument that
it is legally required.

5. During the transition period,
the United Kingdom shall not act as leading authority for risk assessments,
examinations, approvals and authorisation procedures provided for in Union law.

UK position: the UK sees no point to this provision,
and has placed it in square brackets for discussion.

Background: This sub-paragraph does not explicitly reflect
anything in the Council negotiation directives.

Comments: It is not so obviously implicit that the
UK’s exclusion from the EU institutions means that it cannot have a role as
lead authority in risk assessment et al. Put another way, this is arguably an
issue of EU substantive law – where the UK will in effect remain a Member State
during the transition period – rather than EU institutional law, where it will
not.

Article X+3

Specific arrangements relating to the Union's external action

1. Without prejudice to Article
X+1(2), during the transition period, the United Kingdom shall be bound by the
obligations stemming from the international agreements concluded by the Union,
or by Member States acting on its behalf, or by the Union and its Member States
acting jointly.

2. During the transition period,
representatives of the United Kingdom shall not participate in the work of any
bodies set up by international agreements concluded by the Union, or by Member
States acting on its behalf, or by the Union and its Member States acting
jointly.

UK position:Both
paragraphs would change. Paragraph 1 would state that the UK would still be
part of international treaties in accordance with a technical
note by the UK side.Paragraph 2
would give participation rights to the UK in accordance with proposed
amendments to the previous Article. Both paras would be limited in scope to “bilateral
agreements” which the UK had negotiated as a bloc

Background: These two paragraphs transpose para 17 of
the Council negotiation directives.

Comments: The Commission text of these provisions
entail the UK still being bound to the
EU as regards treaties with non-EU states. Logically this applies vice
versa and it would be preferable to spell that out directly. It should follow
that individuals can still invoke the direct effect of such treaties (where it
exists) in the UK during the transition period (for instance, Turkish citizens
with rights under the EU/Turkey association agreement framework).

However, the UK is not bound to non-EU countries to apply such
treaties; neither can non-EU countries directly invoke such treaties against
the UK.Since this could in particular
affect UK exports, it makes sense for the UK to focus on replicating such
treaties: see para 4 below.

The UK’s alternative approach would circumvent this, but its
proposed version of the withdrawal agreement would bind non-EU countries, which
is untenable as a matter of international law. This seems to contradict the UK
government’s own technical note which accepted that non-EU countries would have
to agree by a simplified process that the UK would still be regarded as part of
the EU during the transitional period.

3. In accordance with the
principle of sincere cooperation, the United Kingdom shall abstain, during the
transition period, from any action or initiative which is likely to be
prejudicial to the Union's interests in the framework of any international organisation,
agency, conference or forum of which the United Kingdom is a party in its own
right.

UK version:Delete
this para since this legal obligation applies to the UK anyway.

Background: This paragraph is not reflected in the
Council negotiation directives.

Comments: This para explicitly sets out the
obligation that would anyway arguably still apply implicitly, since other EU
Treaty provisions on sincere cooperation would still be applicable to the UK. The
UK’s proposed deletion therefore makes sense. Note that the UK would
presumably have more freedom to act once any early post-Brexit treaty on EU/UK
security and defence cooperation or policing and criminal law came into force
(see Article X+1 above).

4. During the transition period,
the United Kingdom may not become bound by international agreements entered
into in its own capacity in the areas of exclusive competence of the Union,
unless authorised to do so by the Union.

UK version: Accepted with the addition of the power to
become party to treaties concerning the continued application of pre-Brexit
agreements.

Background: This para transposes the wording of the
final sentence of para 16 of the Council’s negotiation directives, with the
important change that it only applies to ‘exclusive’ competence of the EU. This
change narrows the limits on the UK’s external action.

Comments: Note that the exact extent of exclusivity
of EU external competence is often disputed and even litigated. Some discussion
of the EU27 position on the transition period suggests that the UK would be
banned from signing treaties, but this is false: rather the UK could do so, but
only with authorisation, and that limit would only apply within the area of
exclusive EU competence.

Also, note that the restriction is on the UK becoming ‘bound by’
international treaties during the transition period, not upon negotiation or
signing such treaties. However, it might be argued that such negotiations would
breach para 3 of this Article, although the obvious counter-argument from the
UK would be that a treaty which does not apply until after the transition
period could not affect the Union’s interests given that the UK will no longer
be bound by EU law as such after that point.

There is no mention of the process of approval of the UK becoming bound
by treaties. Note that one of the statements attached to the Council negotiation Directives says that the Council
will approve the UK becoming bound by such treaties, in accordance with the
usual Treaty rules.

The UK’s proposal that it would not need authorisation to agree be
bound by treaties which simply continue pre-Brexit rights and obligations in
force makes sense, although from the EU27 there might be a valid concern that without
some sort of consultation process such a clause could be used to do more than
copy the UK’s previous rights and obligations.

5. Without prejudice to Article
X+1(2), whenever there is a requirement for coordination, including on
sanctions policy, or representation in international organisations or
conferences, the United Kingdom may be consulted by the Commission or the High
Representative of the Union for Foreign Affairs and Security Policy, as the
case may be, on a case-by-case basis.

UK position: This para would be amended: to make
consultation mandatory; to “recognise the need” for it rather than applying “whenever
there is a requirement”; to drop “on a case by case basis” and to provide for further
modalities to be agreed.

Background: This para is not reflected in the
Council’s negotiation directives.

Comments: This paragraph takes account of the UK’s
significant foreign policy rule, in particular regarding sanctions. It’s
conceivable, due to the loss of the UK veto over EU foreign policy during the
transition period, that the UK could be legally bound to use (or not to use)
its Security Council veto during the transition period.As with para 3, in the foreign policy context
the UK would presumably have more freedom to act once any early post-Brexit
treaty on EU/UK security and defence cooperation came into force (see Article
X+1(2) above). Given the central importance of foreign and defence policy the
UK’s proposal for mandatory consultation more generally makes sense.

6 During the transition period,
the United Kingdom shall not provide commanders of civilian operations, heads
of mission, operation commanders or force commanders for missions or operations
conducted under Articles 42 to 44 TEU, nor shall it provide the operational
headquarters for such missions or operations. During the transition period, the
United Kingdom shall not provide the head of any operational actions under
Article 28 TEU.

UK position: placed in square brackets for discussion.

Background: This para is not reflected in the
Council’s negotiation directives, although it is consistent with the overall
thrust of removing the UK from roles in EU bodies.

Article X+4

Specific arrangements relating to Fisheries Policy

As regards the fixing of fishing
opportunities within the meaning of Article 43 TFEU for any period prior to the
end of the transition period, the United Kingdom shall be consulted by the
Commission during the decision-making process within the Council and during
international negotiations in respect of the fishing opportunities related to
the United Kingdom.

UK position: proposed amendments: a) adding “fixing and
allocation of fishing opportunities”; b) deleting the word “transitional”;
c) replacing “the United Kingdom shall be consulted by the Commission during
the decision-making process” by “the EU and the United Kingdom shall agree
the fishing opportunities prior to the decision-making process” d)
replacing the words starting “and during international negotiations” with the
new sentence “The United Kingdom shall participate alongside the EU and
other coastal states in international fisheries negotiations”; and e)
adding a second paragraph, reading: “The modalities relating to the above shall
be agreed between the Parties.”

Background: The Commission draft reflects para 21 ofthe Council negotiation Directives, which
states that “Specific consultations should also be foreseen with regard to the
fixing of fishing opportunities (total allowable catches) during the transition
period, in full respect of the Union acquis.”.

Comments: If the transition period ends as proposed
at the end of 2020, this would only be relevant for one year. It could
continue for longer if the UK’s suggestion of a more flexible time limit is
accepted. The UK’s position differs significantly from the Commission draft in
providing for a separate negotiation process on fishing opportunities, and in
providing for UK to negotiate separately in international bodies, which would
amount to an exception to Article X+3(2) of the Commission draft. Whether the
UK could enter into fisheries treaties would be addressed by Article X+3(4). A reasonable compromise between the UK and EU27 positions would be to guarantee in the withdrawal agreement that the EU decisions on catches in UK waters made during the transitional/implementation period must be based on the rules which applied before Brexit Day.

Article X+5

Supervision and enforcement

During the transition period, the
institutions, bodies, offices and agencies of the Union shall have the powers
conferred upon them by Union law also in relation to the United Kingdom and
natural and legal persons residing or established in the United Kingdom. In
particular, the Court of Justice of the European Union shall have jurisdiction
as provided for in the Treaties.

UK position: Accepts this provision (apart from
deleting the second sentence for technical reasons) but implicitly rejects a
related Commission footnote, discussed further below. The UK also suggests
powers for a Joint Committee to discuss and settle disputes relating to this
part of the agreement, as well as the idea of a “good faith” clause (with no
text proposed).

Background: This reflects the first sentence of para 18
ofthe Council negotiation
Directives, but leaves out the second sentence, which reads: “In particular,
Union institutions, bodies and agencies should conduct all supervision and
control proceedings foreseen by Union law.”

Comments: The most controversial part of this
proposal is a footnote 4 here which states as follows: “In addition, the
Governance and Dispute Settlement Part of the Withdrawal Agreement should
provide for a mechanism allowing the Union to suspend certain benefits deriving
for the United Kingdom from participation in the internal market where it
considers that referring the matter to the Court of Justice of the European
Union would not bring in appropriate time the necessary remedies.” Since there is no suggested text of this
clause, I have not inserted this point separately into this proposed draft of
the agreement.

While sanctions in general are common remedies for breaches of treaties
in international law, and the disapplication of some provisions of an agreement
is common in EU treaties with non-EU states in particular, this specific
suggestion in the context of the withdrawal agreement negotiations is highly
legally and politically problematic.

As a matter of principle, this approach is contradictory: the
Commission thinks that the UK should be a Member State fully covered by the
Treaties, plus a special rule ought to apply which is similar to those
in international treaties in which non-EU countries have a more distant
relationship with the EU. On the contrary: substantive status quo membership
should mean substantive status quo membership.

Moreover, this issue is not referred to in the Council negotiation
directives; in fact, creating such a special rule contradicts the position in those directives that the EU
institutions shall have their normal enforcement role. Arguably it also
interferes with the ‘essential nature’ of the jurisdiction of the ECJ,
contradicting the rule in ECJ case law on its jurisdiction in treaties with
non-EU countries. The argument about timing of ECJ action is unconvincing,
since the Commission can ask for interim measures in ECJ proceedings, and the
deadlines to apply many of the laws concerned would fall after the end of the
transition period. While the UK could presumably challenge the legality of any
sanctions decision in the EU courts, as this proposal does not limit the UK’s
standing to sue EU institutions during the transition period, the issue is whether
such a power should exist in the first place.

Furthermore, the footnote makes no reference to the dispute settlement
process that would usually precede such a sanction, or to the limits on the
proportionality of such measures found in treaties such as the EEA. The
suggestion ignores the careful balance found in the EEA, where partial
disapplication of the Treaty could only follow a decision by Norway et al not
to apply a new law within the scope of the EEA; but there is no such potential
power to refuse to apply a new EU law foreseen for the UK.It is not clear whether the proposed sanction
would only apply to breaches of the transitional rules (and if so, which), or
to other parts of the withdrawal agreement too.

The proposal is then not only legally and politically questionable, but
poorly thought out and justified, not only breaching the Commission’s
obligations as EU negotiator but also spreading ill will in the negotiations.
The phrase “frolic of the Commission’s own” scarcely does justice to the
problematic nature of this proposal.

As for the UK proposal, it is carefully drafted not to impinge upon
the autonomy of EU law, since it would not give the Joint Committee power to
take a decision which binds the EU institutions or Member States as regards the
interpretation of EU law within the EU. However,
the role of the Joint Committee could potentially come into conflict with the
jurisdiction of the ECJ interpreting the agreement. For instance what if the UK
was exempted from a new law, but someone argued in a UK court that it should
not have been, and the UK court asked the ECJ to interpret the withdrawal
agreement? Also the proposal does nt make clear what happens if the parties
cannot agree on a resolution of a dispute within the Joint Committee. In
general, though, the UK proposal comes closer to the normal rules on the
position of non-EU countries under international agreements, although it still
maintains the same flaw as the Commission proposal of treating the UK as an EU
and a non-EU country at the same time.

Article X+6

European Schools

The United Kingdom shall be bound
by the Convention defining the Statute of the European Schools until the end of
the school year that is ongoing at the end of the transition period.

UK position: accepts, with the deletion of the word
“transitional”

Background: There is a footnote referring to the text of the Convention. This issue was not referred to in the
Council negotiation Directives.